Passport procurement probed
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The Australian Passport Office (APO) has faced strong criticism following an audit.
The Australian National Audit Office (ANAO) has uncovered widespread breaches of the Commonwealth Procurement Rules (CPRs) at the APO.
The audit found that between July 2019 and December 2023, none of the 243 contracts awarded by the APO, totalling $476.5 million, involved an open market approach.
Of 73 contracts examined in detail, only 29 per cent were subject to any form of competitive process.
Additionally, procurement decision-making within the Department of Foreign Affairs and Trade (DFAT), under which the APO operates, showed insufficient accountability and transparency.
According to the ANAO, just 53 per cent of 231 procurement approval records referenced “value for money”, and even these cases frequently lacked evidence that such value had been achieved.
This issue extended to significant contracts, where DFAT relied on contract amendments to address cost escalations.
In many instances, contract values doubled due to amendments, without adequate planning or budget forecasting.
The audit also reveals DFAT’s failure to complete a comprehensive procurement strategy, despite hiring a contractor in 2021 at a cost of over $100,000 to develop a multi-year plan.
The plan was never finalised, and instead, DFAT internally developed a substitute in 2023.
Additionally, an estimated 44 per cent of DFAT’s procurements were not reported on the AusTender website within the 42-day limit, further contributing to a lack of public accountability.
Ethical concerns were among the audit's key findings, with DFAT acknowledging “clear indications of misconduct” involving at least 18 DFAT officials and contractors.
The ANAO said these issues reflect a broader “unhealthy culture” within DFAT’s procurement division, prompting an internal review of its procedures and oversight mechanisms.
In response to the audit, DFAT says it has launched a new Procurement, Finance, and Assurance Section within the APO and committed to implementing the ANAO’s seven recommendations aimed at enforcing compliance with ethical standards, enhancing competitive procurement, and reinforcing oversight controls.
The audit findings also revealed that the APO had a pattern of selecting suppliers from pre-existing panel arrangements, deviating from a genuine open tender process.
Such limited tender processes were flagged for potentially undermining open competition, which is a key pillar of the Commonwealth Procurement Rules.
The ANAO says the findings reinforce the need for strengthened accountability and adherence to ethical guidelines across the public sector.
